Honda seen gaining in U.S. on new models as Hyundai fades

By 2019, Honda is expected to have a lineup that's 96 per cent new thanks to models like the upcoming Civic.

Handout, Honda

A new report suggests Honda, GM, Ford and Toyota should be on track to continue gaining market share

by
Jeff Green, Bloomberg | June 4, 2015

Small

Medium

Large

Honda is in the best position to gain U.S. market share through 2019 while Hyundai and Kia face risks, according to a Bank of America Corp. analysis of new-model plans.

Honda, which last raised its annual percentage of U.S. sales in 2012, will have the youngest lineup from the 2016 to 2019 model years as it replaces vehicles representing about 96 per cent of current delivery volume, according to the bank’s Car Wars report. The South Korean automakers trail the industry, with only 70 per cent of models due to be replaced, the study found.

“The replacement rate drives showroom age, which drives market share, which in term drives profits and stock prices,” analyst John Murphy wrote in the report, citing the research showing a similar correlation from 2000 to 2015. The study has tracked industry trends for a quarter century.

Global automakers are spending billions of dollars to update designs, improve technology and add self-driving features as owners, particularly younger buyers, seek the latest capabilities in new cars and trucks. Automakers will introduce an average of 48 models annually for 2016 to 2019, about 26 per cent more than in the previous 20 years, the Bank of America study found.

GM outlook

General Motors, in a spending spree to refresh models neglected during its 2009 bankruptcy, should be able to support its U.S. market share as well as maintain pricing power, according to the report, released this week at a meeting of the Automotive Press Association in Detroit. That includes a new version of the Chevrolet Silverado pickup for the 2019 model year, two years earlier than expected, Murphy said at the event.

Toyota should also keep its market share, while Nissan and European automakers are at risk of losing ground based on replacement plans, Bank of America said.

The focus during the 2016 to 2019 period will be on CUVs, which have helped automakers to improved profits, according to the report. Crossovers offer a car-like ride and the extra room of a truck. U.S. sales should rise to 20 million by 2018 as automakers add the new models, Murphy said at the meeting.

“There has been extreme convergence in quality as all automakers have improved to a relatively common level,” he wrote in the study, which was published with analyst Elizabeth Suzuki. “That leaves almost all trying to compete by differentiating product.”